From knock-off old-man's electric vehicles to industrial giant

Chapter 239 Lithium Extraction Technology from Salt Lakes

Lithium carbonate is the core lithium compound used in batteries, and its production mainly relies on lithium extraction from salt lakes and smelting from spodumene ore.

This year, SQM's lithium production capacity at the world's largest salt lake lithium extraction base in Chile has decreased by 20%, from 4.5 tons last year to 3.8 tons this year, due to water shortages limiting the water consumption of lithium extraction companies.

Meanwhile, cobalt and nickel prices have also increased by 50%-70% year-on-year due to supply contraction and environmental issues in countries such as Congo and Indonesia.

Xu Yi is more concerned about the global production capacity and price increase of lithium carbonate.

After all, as a lithium iron phosphate battery, Polestar batteries are less dependent on precious metals such as cobalt and nickel than ternary lithium batteries. In response to the rising prices of various materials, the advantages of lithium iron phosphate have once again become apparent.

"Our main lithium carbonate suppliers are Tianqi, Ganfeng, SQM, and Zangge. We signed a long-term procurement agreement before the Lunar New Year, securing 1.5 tons of lithium carbonate from Tianqi Lithium every year. Based on quarterly demand, we have stored more raw materials than other battery manufacturers, with an inventory of about 2 tons. At present, the cost has not yet increased significantly."

Liu Yongcheng asked his secretary to bring out an internal procurement report. International lithium carbonate prices have been fluctuating over the past two years. As one of the top two power battery manufacturers in China, Weineng is a core partner of these upstream mining companies. In addition to securing production capacity in advance, it has strong bargaining power. Coupled with its abundant inventory, it is much stronger than other domestic companies in terms of cost control and risk resistance.

Of course, this is on the premise that the global price increase of lithium carbonate does not become too outrageous.

If prices suddenly increase five or even ten times, then even with its strong resilience and inventory, Weineng Battery will be overwhelmed, and all new energy vehicles will have to increase in price.

"However, in response to such strong demand, the company also announced its intention to significantly expand production in the fourth quarter. Domestic companies Qinghai Lithium and Qiqihar Lithium acquired a 23.77% stake in Chile's SQM, which is also intended to vigorously exploit the Atacama Salt Flat and Australia's Talison Lithium Mine," Liu Yongcheng added.

Xu Yi understood that he was rather conservative and was considering a wait-and-see approach.

After all, lithium ore is not a rare commodity.

The lithium metal needed for a new energy vehicle is only about 6 kilograms, and the lithium carbonate needed is only about 30 kilograms.

Currently, the world's publicly known proven lithium (lithium carbonate) reserves are as high as 1.28 million tons.

What is this concept?
1.28 million tons of lithium carbonate can produce at least 42 billion new energy vehicles.

Even if the entire world were to invest the next hundred years, it still wouldn't be able to absorb all 42 billion cars.

Moreover, this is only what has been explored; there are also large areas that have not yet been explored.

Of course, lithium is not only used in automobiles; it is also needed in the metallurgical industry and the lithium battery industry. However, unlike petroleum, lithium, as a metal, can be recycled.

In the long run, it will not become a bottleneck that holds us back.

But this is a long-term perspective.

There are too many variables in the next few years.

The expansion cycle for lithium carbonate production typically takes 12-24 months.

Once international lithium prices skyrocket due to speculation, the situation will be comparable to a soybean crisis.

"The new energy market will continue to grow next year, and the global share of new energy vehicles will continue to increase. Even if domestic and foreign lithium extraction from salt lakes and spodumene smelting expand production together, it will probably be difficult to make up for this gap..."

Xu Yi shook his head. "Besides, this is based on the premise that everything goes smoothly and there is still a shortage. What if there is a major flood or drought abroad, and the government and environmental organizations order a reduction in production? This is equivalent to handing over our lifeline to others, who can harvest whenever they want."

“Then let’s…” Liu Yongcheng was taken aback.

"Besides signing long-term supply agreements, we also need to have control over resources and make technological arrangements..."

Xu Yi summoned the core team from Vaillant Corporation and first finalized several major directions for the future.

To avoid being held hostage by upstream mining companies.

For at least the next five years, production capacity supply will require long-term price lock-in agreements.

In addition, Xu Yi is also preparing to acquire lithium mine equity. At present, the mining industry, both domestically and internationally, is not full of opportunities, but at least the entry threshold is not very high.

The key is to solve the technical problems. This is somewhat counterintuitive.

It's not that China lacks minerals, nor that it lacks companies willing to invest heavily in mining; the key issue is that mining processes and technologies are holding it back.

This includes the salt lake surveying rights that Xingchen previously acquired from Guojin Group.

"Mr. Xu, our exploration rights for the Qinghai Salt Lake are located in the Qarhan Salt Lake area. We completed the exploration last year after paying the renewal fee, and the proven lithium reserves are 150 million tons of LCE. We are going through the exploration-to-mining procedures, and the initial production capacity will reach 1 tons of lithium carbonate per year..."

However, the lithium mines in Qinghai's salt lakes are all high in magnesium-to-lithium ratio, not refined lithium, resulting in lower returns on investment. Currently, direct purchase is more advantageous. If lithium carbonate prices continue to rise, this could provide a certain safety net.

Assistant Xiao Zhou displayed a survey report on the large screen.

Two years later, this surveying right finally came into play, but there are still problems in actual mining and application.

"The battery lab at Xingchen Technology extracted some brine from Qinghai Salt Lake and conducted research. They've recently made some preliminary progress with something called a lithium-ion selective adsorbent, which is one to two times more effective than traditional lithium-ion adsorbents from other mining companies. However, they haven't yet reached the stage of field verification..."

Xu Yidao.

The Star Battery R&D department now has more than 3,000 employees, almost enough to form a small research institute. It is full of talented people, and the research and development of its products are becoming increasingly cutting-edge.

The so-called "lithium-ion adsorbent" is one of the processes in the traditional adsorption method for lithium extraction from salt lakes in China.

It can preferentially adsorb lithium from brine while repelling impurities such as potassium and magnesium.

As mentioned earlier, China does have mineral resources, but the cost of mining them is too high.

It's like gold buried in the ground; you have to break the drill to extract even a tiny bit.

Most of the world's refined lithium mines are monopolized by foreign capital. Although China has abundant lithium reserves, most of them are high magnesium-to-lithium ratio salt lakes that are difficult to mine.

南美“锂三角”智利阿塔卡马、阿根廷翁布雷穆埃尔托、玻利维亚乌尤尼这些地区，盐湖锂浓度高达3000-5000ppm，镁锂比仅5-10:1，开采成本开采成本仅2-3万美刀/吨。

国内盐湖的锂浓度只有200-500ppm，而镁锂比却高达200-500:1，开采成本高达4-5万美元/吨。

This is due to the advantages of foreign resources and complete industrial chains.

This is also due to the relatively backward lithium extraction technology, which has been slow to achieve breakthroughs.

The reason why Xingchen's lithium extraction process from salt lakes progressed so smoothly in the early stages is mainly due to its accumulation of battery materials and electrochemical technology, which enabled it to quickly enter the relevant market.

Domestic high-end power battery manufacturers have a natural competitive advantage in this field.

"For subsequent practical verification and process optimization, our two teams will work together to get the lithium extraction process chain in place and implemented first," Xu Yi said, indicating that they plan to collaborate with the battery teams on both sides to tackle this problem first.

The technology for extracting lithium from salt lakes is somewhat similar to the early carbon fiber production process in China. Everyone understands the scientific principles, and there is a wealth of technical information online, including equipment and processes.

However, the composition of each salt lake is very different, and the lithium content also varies greatly.

This has resulted in each company having its own unique technology and processes, which are kept highly confidential.

To put it simply, countless research teams have been studying lithium extraction processes from different salt lakes for a long time, often focusing only on the specific salt lake environment in a particular region.

For example, Xingchen has the surveying rights to Qinghai Salt Lake, and its current research focuses on the brine extracted from the Qinghai Salt Lake area.

Fortunately, the largest lithium extraction site in China is located there!
If we can truly master the advanced mining technology for salt lakes with high magnesium-to-lithium ratios, achieving an adsorption extraction rate of over 85%, then we could produce 500,000 to 800,000 tons of lithium carbonate annually.

Even if there are price gouging and supply disruptions abroad, or even if there are explosions at the country of origin, it won't have much impact on the domestic new energy industry.

(End of this chapter)